The role of chromatin structure in modulating the functions of DNA in transcription, replication, recombination and repair is becoming increasingly apparent. We have shown that the yeast alpha2 repressor positions a nucleosome adjacent to its operator. This chromatin structure seems to be the mechanism of repression; variant forms of histone H4 that lead to abolition of the structure also lead to expression of a reporter gene driven by the promoter. Hierarchies exist in the contest between transcription factors and histone. While alpha2 can organize chromatin structure and repress transcription, TFIIIA and factors necessary for transcription of yeast tRNA genes establish active transcription complexes and prevent the formation of stable nucleosomes. The Drosophila engrailed protein has strong homology in its homeodomain DNA binding region with yeast alpha2 repressor. Experiments designed to ascertain whether engrailed, expressed in yeast, can repress genes normally under control of alpha2 are underway, in an effort to address the generality of the phenomenon. Mapping of protein DNA interactions in situ has been a major effort in the past year. Use of yeast strains that increase the half-life of the alpha2 repressor has allowed elucidation of the structural features of the complex of the repressor, MCM1 and DNA at the alpha2 operator. Experiments using galactose controlled expression of DNase I in yeast have shown that there is a narrow cusp between no effect and lethality in expression of the gene and detectable DNA cutting. A systematic study of the use of prokaryotic dam methylase for probing chromatin structure has defined the accessibility of nucleosomal, linker, and hypersensitive region DNA to the modifying protein. Studies of the expression of the sporulation induced HSP82 gene have defined elements that are necessary for normal expression, although likely not for meiosis responsiveness, and an apparent repressor sequence. Collaborative studies of higher order chromatin structure and the crystal structure of a nucleosome core particle containing unique sequence DNA continue.